Rao broke his fast after accepting a glass of juice from TRS ideologue Jayashankar at the Nizam's Institute of Medical Sciences.

With tears in his eyes, a frail-looking Rao said in a feeble voice that he was thankful to Congress president Sonia Gandhi, Prime Minister Manmohan Singh and the Leader of the Opposition L K Advani and leaders of all other political parties for supporting the cause of Telangana statehood.

Chandrasekhar Rao said the TRS would help the families of those who were killed for the cause of Telangana.

He thanked all those who took part in the present spell of Telangana agitation.

Asked how Rao reacted immediately on learning about the Centre's conceding to the demand for Telangana statehood, his daughter Kavita said, "He just smiled. He did not say anything to us. May be he did not have the energy to say anything."

Meanwhile, hundreds of TRS workers broke into a celebration hearing the announcement with slogans of 'Jai Telangana'.

TRS supporters, who had been staging angry protests for the last 10 days as the health of TRS chief Chandrashekhara Rao worsened due to his fast, were seen dancing and bursting of crackers on streets and roads.

"This is what we have been waiting for," said Vinod Kumar, a former member of the Parliament of the TRS, as he walked out of the Intensive Care Unit where doctors were closely observing KCR's condition.

Vinod indicated that KCR would end his 11-day fast only after the chief minister personally conveyed the "good" news to him at the NIMS hospital in Hyderabad.

The demand for a separate state of Telangana goes back by five decades, and had last been in serious contention in 1969-70. But this is the first time that the Central government has officially made an announcement in this regard.

"This is a historic moment and a great victory for the people of Telangana", said K Taraka Rama Rao, son of KCR.

Vinod said the difference between the present movement and the fight in 1969 was the resolution of the Telangana people and the sacrifice made by his leader for their goal.

"KCR's fast unto death has forced the government to accept the demand," he said.

TRS leaders have also announced that they would not accept Telangana without Hyderabad as its capital, thus rejecting the demand by a section of Congress that Hyderabad should be made a union territory in case Telangana was formed.

It is not known when the resolution would be moved in the state assembly, and may be clear only after Chief Minister Rosaiah reaches Hyderabad from Delhi.